Midwest states seek to cut time, costs for solar connections

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States across the Midwest are updating their interconnection rules for solar customers, a process likely to cut the time and money required to establish a connection to the grid.

In addition, the new standards will equip utilities to efficiently process solar applications as their numbers likely escalate in coming years, according to an attorney who worked on revisions recently approved by the Iowa Utilities Board.

Updated and improved interconnection standards are “a critical part of moving distributed generation ahead. And having clear, fair and efficient interconnection rules is critical to enabling a healthy distributed generation market,” said Sky Stanfield, an attorney who was involved in negotiating the new standards.

The costs of interconnection are among the “soft costs” of solar installation that have not fallen along with the hardware costs of solar panels in recent years. Through its “SunShot” initiative, the U.S. Department of Energy has attempted to reduce those costs.

Stanfield said that states across the country are changing their interconnection standards, and that in the Midwest, Illinois and Ohio also recently approved new interconnection procedures. Minnesota’s utility regulators now are in the process of doing so.

Iowa’s new rules are an important part of the state’s leadership in renewable energy, said Nathaniel Baer, the energy program director for the Iowa Environmental Council, and also a participant in the development of the new standards. “The new rules are based on a number of national best practices and should support safe and efficient connection of customers’ renewable-energy technologies to the grid.”

Although the new Iowa standards are mandatory only for the rate-regulated utilities – MidAmerican and Alliant – Baer expressed a hope that the state’s many municipal utilities and rural electric cooperatives also will embrace the new rules.

One of the most important and widespread changes adopted would allow more projects to seek expedited approval. Among smaller installations, the old system allowed only rooftop arrays of up to about 10 kW to get fast tracked. That threshold now is 20 kW. Stanfield said the faster process means cutting the review time perhaps in half, from roughly 30 to 15 days.

Among larger arrays, the old rules permitted expedited review for systems of up to 2 MW. The new parameters, taken from the Federal Energy Regulatory Commission, are more nuanced. Faster review is available to systems of up to 5 MW, provided they employ inverters, and depending on the voltage of the line and proximity to a substation. Among systems that do not use inverters, expedited review remains an option for systems smaller than 2 MW.

In an effort to save developers from the several months and thousands of dollars required for a full review process, the new standards allow for a “supplemental review.” If a project initially fails to quality for expedited review, the utility would conduct more screening to determine if a given project would in fact cause problems for the grid.

“Supplemental review has been adopted in California, Massachusetts, Illinois, and Ohio, and this feature will become increasingly valuable as distributed generation penetration increases and more projects fail the (preliminary) screens,” Stanfield wrote in a blog post.

“Those are important changes to keep small systems efficient,” Stanfield said.

Other changes will facilitate the connection process and ease the addition of distributed generation to the electrical system, according to Stanfield. The new rules include energy-storage systems in the definition of distributed generation, creating an administrative path to follow in putting a storage system on the grid.

And they allow developers of distributed-energy systems to obtain a pre-application report from the local utility, providing details on the state of the grid. This allows solar developers to determine early in the process – before they make a large investment of time and money – whether a given project is likely to integrate into the grid without causing major problems.

The new rules also include some higher costs for installation of a distributed system.

Stanfield said it’s critical that states update their interconnection policies before they’re overwhelmed by escalating numbers of solar applications. That has occurred in some states with lots of solar systems on the grid, such as California and Hawaii.

“Minnesota unfortunately had some of this backlog because they issued a community solar-gardens program without having adopted (interconnection) improvements,” Stanfield said. “If you don’t have rules designed to handle a flood of applications, there develops a backlog. And those backlogs create all sorts of impacts on the market. It takes a long time, makes the process unclear and raises the cost. It’s a major headache for the utility as well as the customers.”